By Will Peters

The Canadian Dollar (CAD) is under fresh pressure on Tuesday morning with a slew of forecasters predicting the currency is to suffer yet further losses.

A look at the currency market place in early afternoon London time shows:

The pound sterling to Canadian dollar (GBP/CAD) exchange rate is trading 0.63 pct higher on a daily basis having reached 17914.

These gains will go some way in confirming the GBP/CAD's uptrend which was thrown into doubt yesterday.

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Pound forecasted higher vs Canadian dollar

As mentioned, GBPCAD started the week on a soft note, capped below a trend channel resistance just below 1.80.

Nevertheless, today's recover will confirm the view that the outlook still favours the British pound.

Shaun Osborne at TD Securities is one analyst who has been 100% correct on his calls regarding GBPCAD:

"The cross had plenty of opportunities to weaken in December as the broader rally started to show signs of tiring but there was little sustained interest in pushing the GBP significantly lower.

"Note that the underlying trend in GBPCAD remains bullish on the daily chart — a situation reflected on the longer-term studies too—so we rather think GBP weakness is limited here for the moment. We still think the cross can reach 1.80/1.82 near-term (1.90 from a longer-term perspective looks reachable)."

Canadian dollar forecasts lowered at UBS

This morning comes news from UBS that their 2014 forecasts for the CAD have been lowered.

Strategist Geoffrey Yu at UBS tells us where he reckons the CAD will trade this year:

"Our USD/CAD forecasts have been raised significantly to 1.10 for 1m and 1.12 for 3m. It’s not just about Fed tapering. The string of negative Canadian data surprises since the start of the year – trade, PMI, permits and most significantly, payrolls – will simply magnify the risk of a more dovish reaction from the BoC in coming months against an already uncomfortably low inflation backdrop.

"While a rate cut might be asking too much at this stage, the weak data flow will keep the door open for at least a downgraded assessment by the BoC."

Technicals do not currently favour the Canadian currency

The Canadian dollar (CAD) continues to suffer at the hands of overwhelmingly bearish technical momentum which will play a massive role in future trading decisions amongst investors.

Swissquote Research tell us that they foresee further CAD losses:

"The Canadian dollar, formerly hit by the unexpected trade deficit in November (CAD -0.94bn released on Friday), is currently struggling to pare losses ahead of 1.100-psychological resistance versus its leading trading partner USD. The trend and momentum indicators are solidly bullish, suggesting further upside in USDCAD, yet the overbought conditions (RSI at 70%) need correction.

"And the current corrective recovery is nothing but healthy within the CAD-negative technical picture. A Fibonacci retracement on broader frame highlights coincidence between the fibonacci 38.2% level (1.0804) on 2009-2011 drop and the stop-rally recorded above.

"We place our key support at this level and sit our expectation of weaker CAD on top. This said, the presumed higher trend is clearly a function of divergence between Fed/BoC policy outlooks. And the latest NFPs may have revived Fed-doves introducing delay in USDCAD uptrend in the short-run."